REG - Critical Metals PLC - Interim Results
25/04/2022 07:00
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RNS Number : 1274J Critical Metals PLC 25 April 2022
Critical Metals plc / EPIC: CRTM / Market: Main Market / Sector: Closed End
Investments
25 April 2022
Critical Metals plc ("Critical Metals" or the "Company")
Interim Results
Critical Metals plc, an investment company established to target opportunities
in the critical and strategic metals sector, is pleased to present its
interim results for the six-month period ended 31 December 2021.
Highlights
· Advanced agreement to acquire controlling stake in the copper/cobalt
project located within Small Scale Mining License PEPM 14784 (the "Mining
Licence") in the Democratic Republic of Congo (the "Molulu Project").
· Intensive negotiations were conducted throughout the period to
acquire a majority stake in the Mining Licence from the existing owners of
Amani Mining Katanga SA ("AMK"). Negotiations took place between AMK, Madini
Occidental Ltd Mauritius and the Company, including extensive due diligence,
contract renegotiations, and financial analysis across three jurisdictions.
· Management continued to investigate other potential acquisition
opportunities during the reporting period across a variety of jurisdictions
and commodities.
· Landmark Molulu Project substantially progressed and, once completed,
is expected to deliver near-term cash flows to support future acquisitive
growth amid a commodity super cycle and record metal prices.
· Post-period end, the Company is working towards completion of the
Molulu Project Acquisition and readmission of the enlarged group to the
Standard List of the London Stock Exchange.
For further information on the Company please visit www.criticalmetals.co.uk
(http://www.criticalmetals.co.uk/) or contact:
Russell Fryer Critical Metals plc Tel: +44 (0)20 7236 1177
Rory Murphy / James Bellman Strand Hanson Limited Tel: +44 (0)20 7409 3494
Financial Adviser
Lucy Williams / Heena Karani Peterhouse Capital Limited, Corporate Broker Tel: +44 (0)20 7469 0936
Tel: +44 (0)20 7469 0933
Oonagh Reidy / Catherine Leftley / St Brides Partners Ltd, Tel: +44 (0)20 7236 1177
Financial PR
Chairman's Statement
I am pleased to provide these interim results as Critical Metals progresses
towards completion of the Molulu Acquisition.
Critical Metals entered the market well-capitalised, with a low monthly
expenditure, while investigating over twenty potential acquisition
opportunities.
As announced on 20 May 2021, the Board identified and agreed to invest in an
exciting copper and cobalt project, the Molulu Project, located in the
Democratic Republic of the Congo ("DRC").
Our first proposed acquisition, a controlling stake in this copper/cobalt
project, is expected to provide the Company with near-term cash flows that
will support future aggressive acquisitive growth.
The past six months has been dominated by finalising this first acquisition of
a majority stake in the Molulu Project mining licence from Amani Mining
Katanga SA.
As this transaction spans three different jurisdictions, the last ten months
have been extraordinarily busy as the Board has negotiated and re-negotiated
agreements, conducted ongoing financial analysis, completed extensive 'on the
ground' due diligence, and navigated the dynamic mining regulatory environment
in the DRC, as the world emerges from a Covid-centric world into a prosperous
environment of renewed global growth.
While there have been frustrations with the time it is taking to finalise this
proposed transaction, we are confident that completion will occur in middle of
2022 and events post period end have paid heed to this thesis.
On completion, our first products to be sold into the market are copper and
cobalt, both of which have excellent global demand characteristics and are
experiencing robust pricing. The market fundamentals are ripe for a new
copper/cobalt mine to emerge, given the expected shortfall in copper supply
coupled with surging demand for the red metal, with cobalt also hailed as a
"transition metal" - both crucial for the 'Net Zero' transition, electric
vehicle batteries and innovative aerospace applications.
This urgent need for metals critical to the global energy transition was
highlighted by President Joe Biden invoking the Defence Production Act, which
will see the US administration providing financial support for the mining and
processing of critical minerals, including copper and cobalt.
I wish to personally thank my fellow board members Anthony Eastman and Marcus
Edwards-Jones, for their experienced guidance, deep wisdom, and incredible
patience since Critical Metals listed. I also wish to thank our UK, Belgian,
Congolese, and Mauritius advisers for their expertise and patience during this
exciting period in our growth trajectory.
Importantly, I want to express my heartfelt thanks to our loyal shareholders
who have patiently stood by us while we advance on closing the Molulu Project
acquisition and seek to rapidly push it into production thereafter.
We look forward to closing the Molulu Project acquisition in the months ahead.
With copper currently around the US$10,000/t mark and cobalt around $80,000/t,
we believe now is an optimal time to acquire such an asset in a mineral-rich
location. We will be adhering to the best possible mining practices and will
develop our ESG policy post readmission, which will guide us as we develop
this exciting asset responsibly.
The Board believes the Company is perfectly positioned to take advantage of
the 'Green Energy' and 'Electrification' trends while supporting accelerating
global growth, and we are highly enthusiastic about the exciting journey
ahead.
Russell S. Fryer
Chief Executive Officer
25 April 2022
Statement of Comprehensive Income for the six months ended 31 December 2021 Notes 6 months to 31 December 2021 (unaudited) 6 months to 31 December 2020 (unaudited) 12 months to 30 June 2021 (audited)
£ £ £
Revenue
Revenue from continuing operations - - -
- - -
Expenditure
Costs associated with listing - (64,574) (122,306)
Other expenses (284,554) (87,537) (225,278)
(284,554) (152,111) (347,584)
Loss on ordinary activities before taxation (284,554) (152,111)
(347,584)
Taxation on loss on ordinary activities - - -
Total comprehensive income for the year attributable to the owners of the (284,554) (152,111) (347,584)
company
Earnings per share (basic and diluted) attributable to the equity holders 3 (0.68) (0.68) (1.18)
(pence)
The statement of comprehensive income has been prepared on the basis that all
operations are continuing operations.
Statement of Financial Position for the six months ended 31 December 2021 Notes 31 December 2021 (unaudited) 31 December 2020 (unaudited) 30 June 2021 (audited)
£ £ £
CURRENT ASSETS
Trade and other receivables 139,702 24,483 17,851
Cash at bank and in hand 1,069,770 630,148 1,483,544
1,209,473 654,631 1,501,395
TOTAL ASSETS 1,209,472 654,631 1,501,395
CURRENT LIABILITIES
Trade and other payables 23,686 77,269 31,055
TOTAL LIABILITIES 23,686 77,269 31,055
NET ASSETS 1,185,786 577,362 1,470,340
EQUITY
Called up share capital 4 208,298 151,503 208,298
Share premium account 4 1,735,315 749,497 1,735,315
SBP reserve 5 45,838 - 45,838
Retained earnings (803,665) (323,638) (519,111)
TOTAL EQUITY 1,185,786 577,362 1,470,340
Statement of Changes in Equity Issued Share Capital Share Premium Retained Earnings Total Equity
for the six months ended 31 December 2021 SBP Reserve
£ £ £ £ £
As at 1 July 2020 71,428 68,572 - (171,527) (31,527)
Total comprehensive income for the period - - - (152,111) (152,111)
Shares issued during the period 80,075 720,675 - - 800,750
Shares issue costs - (39,750) - - (39,750)
As at 31 December 2020 151,503 749,497 - (323,638) 577,362
Total comprehensive income for the period - - - (195,473) (195,473)
Shares issued during the period 56,795 985,818 - - 1,042,613
Warrants issued during the period - - 45,838 - 45,838
As at 30 June 2021 208,298 1,735,315 45,838 (519,111) 1,470,340
Total comprehensive income for the period - - - (284,554) (284,554)
Shares issued during the period - - - - -
Share issue costs - - - - -
As at 31 December 2021 208,298 1,735,315 45,838 (803,665) 1,185,786
Share capital Amount subscribed for share capital at nominal value.
Share premium Amount subscribed for share capital in excess of nominal value.
SBP reserve Cumulative charge recognised under IFRS 2 in respect of share-based payment
awards.
Retained earnings Cumulative other net gains and losses recognised in the financial statements.
Statement of Cashflow for the six months ended 31 December 2021 31 December 2021 (unaudited) 31 December 2020 (unaudited) 30 June 2021 (audited)
£ £ £
Cash from operating activities
Loss for the year (284,554) (152,111) (347,584)
Adjustments for:
Foreign exchange - - 8,009
Operating cashflow before working capital movements (284,554) (152,111) (339,575)
Increase in trade and other receivables (106,596) (24,066) (17,435)
Decrease increase in trade and other payables (22,624) (16,747) (62,960)
Net cash used in operating activities (413,774) (192,924) (419,970)
Cash from financing activities
Proceeds on the issue of shares - 761,000 1,849,451
Net cash from financing activities - 761,000 1,849,451
Net (decrease) / increase in cash and cash equivalents (413,774) 568,076 1,429,481
Cash and cash equivalents at beginning of year 1,483,544 62,072 62,072
Foreign exchange - - (8,009)
Cash and cash equivalents at end of period 1,069,770 630,148 1,483,544
Notes to the financial statements for the 6 months ended 31 december 2021
1. General Information
The condensed interim financial statements of Critical Metals plc (the
"Company") for the six-month period ended 31 December 2021 have been prepared
in accordance with Accounting Standard IAS 34 Interim Financial Reporting.
The interim report does not include all the notes of the type normally
included in an annual financial report. Accordingly, this report is to be read
in conjunction with the annual report for the year ended 30 June 2021, which
was prepared in accordance with UK adopted International Accounting Standards
(IFRS) and the Companies Act 2006, and any public announcements made by
Critical Metals plc during the interim reporting period and since.
These condensed interim financial statements do not constitute statutory
accounts as defined in Section 434 of the Companies Act 2006. The Group's
statutory financial statements for the year ended 30 June 2021 prepared under
IFRS have been filed with the Registrar of Companies. The auditor's report on
those financial statements was unqualified and did not contain a statement
under Section 498(2) of the Companies Act 2006. These condensed interim
financial statements have not been audited.
Basis of preparation - going concern
The interim financial statements have been prepared under the going concern
assumption, which presumes that the Group will be able to meet its obligations
as they fall due for the foreseeable future.
At 31 December 2021 the Group had cash reserves of £1,069,770 (30 June 2021:
£1,483,544 / 31 December 2020: £630,148).
The Directors have made an assessment of the Company's ability to continue as
a going concern and are satisfied that the Company has adequate resources to
continue in operational existence for the foreseeable future. The Company,
therefore, continues to adopt the going concern basis in preparing its
consolidated financial statements.
The financial information of the Company is presented in British Pounds
Sterling (£).
Accounting policies
The accounting policies adopted are consistent with those of the previous
financial year and corresponding interim reporting period.
Critical accounting estimates and judgements
The preparation of interim financial information requires management to make
judgements, estimates and assumptions that affect the application of
accounting policies and the reported amounts of assets and liabilities and the
reported amounts of income and expenses during the reporting period. Although
these estimates are based on management's best knowledge of current events and
actions, the resulting accounting estimates will, by definition, seldom equal
related actual results.
In preparing the interim financial information, the significant judgements
made by management in applying the Company's accounting policies and the key
sources of estimation uncertainty were the same as those that applied to the
financial statements for the year ended 30 June 2021.
1.1. New and amended standards adopted by the group
A number of new or amended standards became applicable for the current
reporting period. These new/amended standards do not have a material impact on
the Company, and the Company did not have to change its accounting policies or
make retrospective adjustments as a result of adopting these standards.
The Company is not affected materially by the effects of seasonality.
Regardless of this fact comparative figures to the period ending 31 December
2020 have been included for comparability and increase the comprehensibility
of the financial statements.
The directors have concluded that there are no key assumptions concerning the
future and other key sources of estimation uncertainty at the reporting date
that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year.
2. Segmental analysis
The Company manages its operations in one segment, being seeking a suitable
investment. The results of this segment are regularly reviewed by the board as
a basis for the allocation of resources, in conjunction with individual
investment appraisals, and to assess its performance.
3. EARNINGS per share
The calculation of the basic and diluted earnings per share is calculated by
dividing the profit or loss for the year by the weighted average number of
ordinary shares in issue during the year
6 months to 31 December 2021 6 months to 31 December 2020 12 months to 30 June 2021
Loss for the year from continuing operations - £ (284,554) (152,111) (347,584)
Weighted number of ordinary shares in issue 41,659,735 22,380,252 29,398,013
Basic earnings per share from continuing operations - pence (0.68) (0.68) (1.18)
There is no difference between the diluted loss per share and the basic loss
per share presented. Share options and warrants could potentially dilute basic
earnings per share in the future but were not included in the calculation of
diluted earnings per share as they are anti-dilutive for the year presented.
At period end 9,240,714 warrants were in issue giving the rights to purchase
shares on a 1:1 basis.
4. Share capital and share premium
Number of Shares on Issue Share Capital £ Share Premium £ Total £
Balance at 30 June 2020 14,285,714 71,428 68,572 140,000
Ordinary shares of £0.005 each issued at par on 29 Sep 2020 16,015,000 80,075 720,675 800,750
Share issue expenses in period - (39,750) (39,750)
Balance at 31 December 2020 30,300,714 151,503 749,497 901,000
Exercise of £0.10 warrants during the year 10,450,000 52,250 992,750 1,045,000
Exercise of £0.05 warrants during the year 909,021 4,545 40,906 45,451
Cost of share issues - - (47,838) (47,838)
Balance at 30 June 2021 41,659,735 208,298 1,735,315 1,943,613
Balance at 31 December 2021 41,659,735 208,298 1,735,315 1,943,613
The Company has only one class of share. All ordinary shares have equal voting
rights and rank pari passu for the distribution of dividends and repayment of
capital.
5. SBP RESERVE
As at
30 December 2021 £
Broker & advisory placing warrants Issued ( ) 45,838
At 31 December 2021 45,838
On 29 September 2020, the Company issued 1,265,000 warrants to various
advisors along with 909,021 warrants to Peterhouse Capital as broker for
services rendered prior to admission, valid for 24 months from Admission to
subscribe for ordinary shares at 0.05p per share.
On 29 September 2020, the Company also issued 140,000 warrants to various
advisors for services rendered prior to Admission, valid for 24 months from
Admission to subscribe for ordinary shares at 0.10p per share.
The fair value assigned to the advisor and broker warrants for the period
ending 30 June 2021 was £45,838 (2020: £nil) The referred value above was
calculated using the Black Scholes pricing model and the inputs into the model
were as follows:
Date of grant Number of warrants Share Price Exercise Price Expected volatility Expected life Risk free rate Expected dividends
29 Sep 2020 1,265,000 £0.05 £0.05 50.00% 2 0.01% 0.00%
29 Sep 2020 140,000 £0.05 £0.10 50.00% 2 0.01% 0.00%
6. Events subsequent to PERIOD end
There were no events subsequent to period end requiring disclosure.
A copy of these results will be made available on the Company's website at
www.critical metals.co.uk.
**ENDS**
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